Old Town developer suing city faces $38K lien filed by law firm

This blighted building in Old Town is tied to a lawsuit an East Lansing developer filed against the city and three City Council members. Sam Saboury wants to put 23 low-income rental units in that area as part of mixed-use project.(Photo: Eric Lacy / Lansing State Journal)Buy Photo

LANSING -- An East Lansing developer who is suing the city because he didn't get tax breaks for an Old Town housing project owes a law firm that represented him over $38,000 in legal fees and costs.

Court records show developer Sam Saboury's first lawyer, Sheri Cataldo, cut ties with him last month after she notified him three times in five months of "a continuing breakdown in the relationship."

Lansing City Attorney Jim Smiertka(Photo: Courtesy photo)

As of May 9, records show Saboury owed $38,144.69 to Cataldo and the Southfield law firm Sullivan, Ward, Asher & Patton. P.C., for fees and costs - plus interest - based on legal services rendered and expenses paid.

Jeffrey Ray, Saboury's new Lansing-based attorney, wrote Thursday in an email the "private matter" between his client, Cataldo and the law firm, doesn't change Saboury's willingness to reach a settlement with the city.

"There is hope that the parties can find a way to make that happen through a resolution that would be mutually beneficial to all and provide more affordable housing options in the Old Town area," Ray said.

Messages left Thursday with Saboury weren't returned. Cataldo commented Thursday night via email: "As the record reflects, I had to withdraw for reasons unrelated to the merits of the case."

The federal lawsuit, filed July 13, alleged the city and three council members violated the federal Fair Housing and Civil Rights acts when they voted against a tax incentive for Saboury's project.

Saboury's $5.9 million project aimed to turn an abandoned warehouse on the 1100 block of North Washington Avenue into 23 units of affordable housing and 5,000 square feet of retail space.

City Attorney Jim Smiertka said Thursday the city could be willing to reconsider the Old Town project with some type of incentives during its ongoing settlement "discussions."

"We’re just leaving our options open and maintaining the lawsuit," Smiertka said Thursday. “If there is a great development deal then so be it.”

A settlement conference for the two parties, before a magistrate, is scheduled for Dec. 18 in U.S. District Court in Grand Rapids. A jury trial is set for Feb. 13 before Judge Robert J. Jonker.

The four Council members who voted against the request were At-Large Council Members Judi Brown Clarke and Carol Wood, 1st Ward Council Member Jody Washington and 3rd Ward Council Member Adam Hussain.

On Thursday, Smiertka said he wasn't sure if Saboury could request a similar incentive, known as a PILOT (payment in lieu of taxes), for his project in an effort to resolve the legal matter.

"I'm not going to do anything until I see what the proposal is," Smiertka said of the city's legal options.

Saboury has the option of making a 10% payment for his project, which would not require Council's approval. Saboury told the State Journal after the vote he can't finance the project with a 10% payment.

On Feb. 6, Jonker dropped Wood, Washington and Hussain as defendants in the lawsuit. Saboury hasn't explained why Clarke was never listed as a defendant.

Clarke, who is running for mayor this year, denies she and her colleagues were discriminatory and said they were simply doing the best they could to serve their constituents' needs and increase the city's tax base.

Saboury's lawsuit follows a Fair Housing Act complaint that Mayor Virg Bernero said was filed in May 2016 by a resident. The complaint was sent to the U.S. Department of Housing and Urban Development and alleges that council members' 4-4 vote on the tax break for Saboury's project was a violation.